Simultaneous detection of BOLD and perfusion signals has a number of advantages, including efficient acquisition of the two functional images and minimized temporal and spatial variations between them. These advantages may be particularly important in the determination of cerebral metabolic rate of oxygen (CMRO2) from a combination of perfusion and BOLD measurements. However, MR signals attenuate significantly in the brain regions with severe field inhomogeneities, such as inferior frontal lobe and lateral and meso temporal lobes. This image artifact greatly interferes with the use of functional MRI techniques, particularly in the study of neuropsychiatric and neuropharmacological disorders. We have developed a simultaneous BOLD and perfusion imaging technique with single-shot interleaved z-shim EPI (SSIZS-EPI) to reduce susceptibility artifacts while preserving fast image acquisition speed. Perfusion signal was obtained by labeling the in-flowing arterial blood spins, whereas BOLD contrast was achieved by effective transverse relaxation (T2*) weighting. This technique has been applied to functional experiments with a neuropsychiatric paradigm (composed of threat and neutral words) to assess the feasibility of detecting brain activation in the meso-temporal lobes. Experiments on human brain demenstrated that baseline images acquired with the simultaneous BOLD/perfusion SSIZS-EPI sequence had significantly improved signal intensities, compared with conventioanl EPI, in the ventral prefrontal lobe, meso-temporal lobes, and lateral temporal lobes. Functional perfusion and BOLD maps (p < 0.01) for normal subjects (n = 7) with threat words vs. neutral words showed increased brain activities in the peri-amygdalar regions in both perfusion and BOLD maps, similar to previous results obtained from H215O PET with a similar paradigm. With its fast acquisition speed and reduced susceptibility artifacts, this new technique should be very useful for event-related functional experiments for neuropsychiatric and neuropharmacological studies.